Market News

The Euro continues to decline as the Eurozone crisis lingers on; thus far in a light trading week.

In Tokyo, the EUR/USD pair had dropped to a 4-week trough and was trading at $1.2984 before recovering to 1.3027; since mid-June the Euro has lost about 3% of its value relative to the greenback.

The U.S. Dollar slipped versus the safe haven Japanese Yen driven there by worried investors who fear that a Chinese credit crunch might be imminent.

The recent U.S. Dollar rally paused as investors reconsider comments made by two officials of the Federal Reserve which contradict Ben Bernanke’s statement last week which suggested that the Fed’s asset purchasing program was likely to be imminently curtailed.

During Monday’s Asian trading session the U.S. Dollar Index traded higher and close to a 2½ week peak; individually, the greenback’s value surged against the Yen following last week’s Fed announcement which heightened expectations that the central bank would soon be tightening its monetary policy.

The safe haven U.S. Dollar was in heavy demand during Friday’s Asian trading session following the announcement that the Federal Reserve Ban is seriously considering putting a halt to its ultra loose policy by reining in some, if not all, of its asset purchase program.

The U.S. Dollar firmed during the Asian trading session after yesterday’s broad rally in the wake of the announcement by the Federal Reserve Bank that it would start to ease back on its stimulus program, perhaps beginning as soon as the year’s end, provided that the U.S. economic recovery continues as expected.

Gold futures fell on Tuesday and hit their lowest level in nearly a month as traders pondered whether the Federal Reserve will signal a taper in today’s announcement, which is set for 2pm EST.

The U.S. Dollar held above but remained close to a recently struck 2-month trough against the Japanese Yen however analysts believe that any potential gains are likely to be limited until after the Federal Reserve addresses the issue of quantitative easing at its next monetary policy meeting.

The Japanese Yen remained close to a recently struck 2-month peak versus the U.S. Dollar as well as the common currency Euro as investors await news from the U.S. Federal Reserve to gauge what the Fed’s next step might be.

The U.S. Dollar Index continued to languish near a recently struck 4-month trough as a short-lived rally in the global stock markets whetted risk appetite and sent investors in search of higher yielding currencies such as the Euro and commodity-linked currencies.

The U.S. Dollar Index, which investors use to gauge the greenback’s weight relative to its major peers, held close to a 4-month trough during the Asian trading session as investors debate whether or not the Federal Reserve Bank might tighten the reins on some of its existing stimulus measures.

The Japanese Yen eased against the U.S. Dollar after obtaining the single largest day’s gains in more than three year’s following the Bank of Japan’s decision to hold the status quo rather than take any additional stimulus measures.

The U.S. Dollar’s recovery was extended against the Japanese Yen and moved well off the 2-month trough struck during the previous trading session. Since Friday, the USD/JPY pair has gained 3.3% and was recently trading at 98.12 Yen, well off that day’s 94.98 Yen low.

The U.S. Dollar was able to extend recent gains against the Japanese Yen during the Asian trading session following Friday’s release of U.S. labor data which slightly beat analysts’ expectations.